#7 – The Free Market Ignores the Poor
MAY 30, 2014 by LEONARD E. READ
(Editor’s Note: This week’s cliché was authored decades ago by FEE’s founder, Leonard E. Read, and originally appeared in the first edition of Clichés of Socialism. Barely a word has been changed and though a few numbers are dated, the essay’s wisdom is as timely and relevant today as it ever was.)
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Our society is inundated with half-truths and misconceptions about the economy in general and free enterprise in particular. The “Clichés of Progressivism” series is meant to equip students with the arguments necessary to inform debate and correct the record where bias and errors abound.
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#7 – The Free Market Ignores the Poor
Once an activity has been socialized for a spell, nearly everyone will concede that that’s the way it should be.
Without socialized education, how would the poor get their schooling? Without the socialized post office, how would farmers receive their mail except at great expense? Without Social Security, the aged would end their years in poverty! If power and light were not socialized, consider the plight of the poor families in the Tennessee Valley!
Agreement with the idea of state absolutism follows socialization, appallingly. Why? One does not have to dig very deep for the answer.
Once an activity has been socialized, it is impossible to point out, by concrete example, how men in a free market could better conduct it. How, for instance, can one compare a socialized post office with private postal delivery when the latter has been outlawed? It’s something like trying to explain to a people accustomed only to darkness how things would appear were there light. One can only resort to imaginative construction.
To illustrate the dilemma: During recent years, men and women in free and willing exchange (the free market) have discovered how to deliver the human voice around the earth in one twenty-seventh of a second; how to deliver an event, like a ball game, into everyone’s living room, in color and in motion, at the time it is going on; how to deliver 115 people from Los Angeles to Baltimore in three hours and 19 minutes; how to deliver gas from a hole in Texas to a range in New York at low cost and without subsidy; how to deliver 64 ounces of oil from the Persian Gulf to our Eastern Seaboard—more than half-way around the earth—for less money than government will deliver a one-ounce letter across the street in one’s home town. Yet, such commonplace free market phenomena as these, in the field of delivery, fail to convince most people that “the post” could be left to free market delivery without causing people to suffer.
Now, then, resort to imagination: Imagine that our federal government, at its very inception, had issued an edict to the effect that all boys and girls, from birth to adulthood, were to receive shoes and socks from the federal government “for free.” Next, imagine that this practice of “free shoes and socks” had been going on for lo, these 173 years! Lastly, imagine one of our contemporaries—one with a faith in the wonders of what can be wrought when people are free—saying, “I do not believe that shoes and socks for kids should be a government responsibility. Properly, that is a responsibility of the family. This activity should never have been socialized. It is appropriately a free market activity.”
What, under these circumstances, would be the response to such a stated belief? Based on what we hear on every hand, once an activity has been socialized for even a short time, the common chant would go like this, “Ah, but you would let the poor children go unshod!”
However, in this instance, where the activity has not yet been socialized, we are able to point out that the poor children are better shod in countries where shoes and socks are a family responsibility than in countries where they are a government responsibility. We’re able to demonstrate that the poor children are better shod in countries that are more free than in countries that are less free.
True, the free market ignores the poor precisely as it does not recognize the wealthy—it is “no respecter of persons.” It is an organizational way of doing things featuring openness, which enables millions of people to cooperate and compete without demanding a preliminary clearance of pedigree, nationality, color, race, religion, or wealth. It demands only that each person abide by voluntary principles, that is, by fair play. The free market means willing exchange; it is impersonal justice in the economic sphere and excludes coercion, plunder, theft, protectionism, subsidies, special favors from those wielding power, and other anti-free market methods by which goods and services change hands. It opens the way for mortals to act morally because they are free to act morally.
Admittedly, human nature is defective, and its imperfections will be reflected in the market (though arguably, no more so than in government). But the free market opens the way for men to operate at their moral best, and all observation confirms that the poor fare better under these circumstances than when the way is closed, as it is under socialism.
- Explaining how a socialized activity could actually be done better by private, voluntary means in a free market is a little like telling a blind man what it would be like to see. But that doesn’t mean we just give up and remain blind.
- Examples of the wonders of free and willing exchange are all around us. We take them for granted. Just imagine what it would be like if shoes and socks had been a government monopoly for a couple hundred years, versus the variety and low cost of shoes as now provided in free countries by entrepreneurs.
- Free markets open the way for people to act morally, but that doesn’t mean they always will; nor should we assume that when armed with power, our behavior will suddenly become more moral.
- For more information, see:
"The Man Behind the Hong Kong Miracle" by Lawrence W. Reed: http://tinyurl.com/mkkrcpu
"Can the Free Market Provide Public Education?" by Sheldon Richman: http://tinyurl.com/m8vjqvp
"Presidents and Precedents" by Lawrence W. Reed: http://tinyurl.com/pfrmbux
"The Miracle and Morality of the Market" by The Freeman: http://tinyurl.com/ocva6hu